Republican rise puts Obamacare under more pressure

The outlook for the Obamacare health reforms are once again in doubt following last week’s mid-term elections in which the Republicans won control of the Senate.

The rise of the Republicans, which also saw them extend their majority of the House of Representatives, means they will set the agenda in Washington for the next two years and make it much harder for President Obama to push through new legislation.

The power shift comes as enrolment into the Affordable Care Act (ACA) health insurance plans set up under Obamacare is well below target, with the latest predictions that around 9 million people will have signed up by the end of next year, short of the 13 million projected by the Congressional Budget Office (CBO).

The US Health and Human Services (HHS) department also says it will take “quite a lot longer” to meet the 2017 objective of 25 million enrolees.

The ACA was designed to allow currently uninsured Americans – estimated at around 50 million people – to purchase affordable health policies.

Obamacare is of course already in play, having been passed in 2010, but has been under siege ever since and there are already calls for Senate Republicans under new Majority Leader Mitch McConnell to repeal the new healthcare law in 2015 using a complex procedure known as reconciliation that can be deployed to take down or amend legislation that affects the federal budget.

While the President would be able to veto any repeal, conservatives in Washington are desperate to undermine Obamacare in order to prevent measures such as a requirement for employers to provide health insurance for their workers, which has been delayed until 2015.

Others in the party argue that without a Republican President, pushing for repeal would be a wasted effort, and the part should concentrate on minor tweaks to Obamacare, as well as other pressing issues such as reforming the US tax system.

Opponents of Obamacare have just won a skirmish after the US Supreme Court agreed to hear a legal challenge to the law that will determine whether health insurance subsidies should come out of federal or state budgets.

At the moment, 36 states rely on central government to make the payments, with just 14 states and the District of Columbia setting up health insurance marketplaces called exchanges that provide subsidies. Moreover, two states – Oregon and Nevada – are planning to wind up their exchanges in 2015.

Conservatives have argued that federal exchanges set up to serve residents of states that have not established their own are not authorised under the wording of the ACA. The lawsuit specifically aims to overturn a May 2012 ruling by the Internal Revenue Service which said it would grant tax credits to enrolees regardless of whether they got their insurance from state or federal exchanges.

If the Supreme Court agrees with that position, enrolment rates in the plans could start to lag targets even more and weaken Obamacare ahead of the next Presidential campaign in 2016.